cancel
Showing results for 
Search instead for 
Did you mean: 

FICO maxed CC Utilization simulation

tag
Anonymous
Not applicable

FICO maxed CC Utilization simulation

I just had a friend come over and we pulled her report and two CC are maxed but, do not show on the FICO simulator either as a simulation for paying down the CC.  From everyones experience about how many points would she expect to see as an increase by bringing it to 50% util vs. the current 110% util? I've seen somewhere that someone said typically you get 10 to 15 pts on average per 10% decrease in utilization.
Message 1 of 10
9 REPLIES 9
Anonymous
Not applicable

Re: FICO maxed CC Utilization simulation

No simulator?
Let me stab-and guess  
20 points x2 for over the limit cards=40 points
13 points X 10%utl 6 = 78
 
100 to 120 points-

GETNUMBERSUP wrote:
I just had a friend come over and we pulled her report and two CC are maxed but, do not show on the FICO simulator either as a simulation for paying down the CC.  From everyones experience about how many points would she expect to see as an increase by bringing it to 50% util vs. the current 110% util? I've seen somewhere that someone said typically you get 10 to 15 pts on average per 10% decrease in utilization.



Message 2 of 10
Anonymous
Not applicable

Re: FICO maxed CC Utilization simulation

yes..very odd..it is not giving her the balances for the maxed out cards in the FICO simulator as a paydown option...
Message 3 of 10
Anonymous
Not applicable

Re: FICO maxed CC Utilization simulation



GETNUMBERSUP wrote:
yes..very odd..it is not giving her the balances for the maxed out cards in the FICO simulator as a paydown option...



I know someone who over maxed out 4 credit cards.  They dont have any other recent negatives.  Their current scores are in the mid 500's. When they pay their cards to below 10% util, what should they expect.
Message 4 of 10
RobertEG
Legendary Contributor

Re: FICO maxed CC Utilization simulation

Well, this will be controversial, but I have been doing statistical reverse modeling of the numerical FICO model for a couple of years now, and comparing my modeling with both the real results I achieve, and those reported by others, and here are my numerical estimates for the score impact of changes in the two major FICO categories of late payments (baddies), and revolving % util, assuming NOTHING ELSE changes in the credit report  While my data pool used for evaluation of my model is admittedly slim, I think that the numbers I give below are more empirical than the many “guestimates” I see posted on this site.  But I also realize that caution is needed in trying to arrive at an overall FICO score based upon what I present, for decrease in revolv %util that was gained as a result of a new install loan or decrease in CL due to a BT, for example, or hard inquires needed to secure any new credit, will also affect the FICO score in other categoreis, such as credit mix and %install util, and that account aging is not reflected. .  These are only category projections, with all else assumed constant, and thus what can be expected for immediate changes that influence only one category. Short term, but that is what most seem to be striving for on here when it comes to immediate score impact.

Mulltiple hits on other cards will compound.

Payment History (baddies):  298 pts max

I show that a 30-day late, the first month it hits, will hit credit score for -12, and that this negative hit will reduce by 1 pt every six months for the full 7 years that it remains.  A 60-day late will hit in the first month for -20, and decrease by about 3 pts every month, until at 24 months, at which point, it will hit the same -8 as a 30-day late, and decrease thereafter at 1 point per month up to the 7 years, the same as a 30-late.  Both will be, for example, a -4 point hit at 48 months.  However, a 90-day late is serious, and hits in the first month at -30, and then decreases by 2 points for each 6 months up to the full 7 years (e.g. still -13 after 48 months).  And this seems to be compounded upon the earlier hit for the 60-late, which raises the negative ante.  Not good at all.  Major bad stuff going on here.

%Revolv Util: (assumes 213 max for %revolv, and 42 max  for %install):

90% RevolvUtil, loss of -172;  80%util, loss of -136;  70%util, loss of -104;  60%util, loss of -77; 50%util, loss of -53; 40%util, loss of -34;  30%util, loss of -19;  20%util, loss of -8;  10%util, loss of -2.

Hard Inquires:

-10 first month, decreasing linearly to 0 at 13 months.

 

Take them or leave them, but these are my score impact projections for each category, assuming that the others remain constant.



Message Edited by RobertEG on 02-21-2008 01:36 AM

Message Edited by RobertEG on 02-21-2008 01:42 AM

Message Edited by RobertEG on 02-21-2008 01:53 AM
Message 5 of 10
Anonymous
Not applicable

Re: FICO maxed CC Utilization simulation



RobertEG wrote:

Hard Inquires:

-10 first month, decreasing linearly to 0 at 13 months.


Hard INQs do not decay gradually.  They have the full effect for the entire time they are counted in scoring, resuting in a sudden jump when they stop counting due to age.
 
Message 6 of 10
RobertEG
Legendary Contributor

Re: FICO maxed CC Utilization simulation

Thanks, Cheddar.  JUst my guess based on what others have said, and what my experience has shown.  I have seen so many conflicting statements throughout various past posts on the decaying of the effect of hard inqs over the first year.  Some say they reduce stepwise,at 6 months, for example, and others say they remain in full for 12 months.  My personal experience seems to indicate some type of decay, but my data is so limited that, for math purposes, I just assumed linear.  Whio knows for sure?  And this is not one of the biggie FICO categories, so is not a major factor when compared to aging of baddies and changes in %util, for example.
Another assumption that is bantered about so frequently in numerous posts on this site is the statement that %util of 1-9% is somehow a magic FICO goal, and is better than a 0%util.  I have never seen anything other that postulation that supports this widely used mantra.
We can just share experiences and learn.  I agree that an accurate FICO model would be almost impossible to develop, but that is not, as been said, the important thing.  Being able to put some approximate numbers on short term changes can be useful for those who need to apply for credit in the near future, and the current one dimensional FICO model presented online is woefully inadequate, and often misleading, in seeing the effect of actions on multiple categories.


Message Edited by RobertEG on 02-22-2008 06:10 AM
Message 7 of 10
MidnightVoice
Super Contributor

Re: FICO maxed CC Utilization simulation

I think that part of the problem with modeling the system is that effects change depending on your initial score.  I have two scores in the 780s, and inqs and new credit seem to have almost no effect at all!  They have fluctuated over a total range of abouit 10 points in the last 5 months when I had inqs hit, 3 new CCs hit and a new car loan.  Util has varied but never been over 10% overall
The slide from grace is really more like gliding
And I've found the trick is not to stop the sliding
But to find a graceful way of staying slid
Message 8 of 10
haulingthescoreup
Moderator Emerita

Re: FICO maxed CC Utilization simulation

I believe that what is "decaying" is the penalty for the newness of the account. The inq is holding stable (all 2-5 points of it), but the account that resulted from it gradually ages, and if you don't screw it up, there are score increases in little increments throughout that first year, as the newness penalty is reduced.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 9 of 10
Anonymous
Not applicable

Re: FICO maxed CC Utilization simulation



haulingthescoreup wrote:
I believe that what is "decaying" is the penalty for the newness of the account. The inq is holding stable (all 2-5 points of it), but the account that resulted from it gradually ages, and if you don't screw it up, there are score increases in little increments throughout that first year, as the newness penalty is reduced.

Yep.  What HTSU said.

 
Message 10 of 10
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.